PART I: The Only Way to Fix the Deficit–Multiply Jobs (William Drayton)

PART II: Nice Ideas But So Is Icing Cover Feces (Robert Steele)

PART III: Create Jobs? As an End In Themselves? To Do What? Why? (Alexander Carpenter)

PART IV: Related Recommended Reading (Robert Steele)

The core take-away (from PART III)

Beyond its inherent merit and explicit substance,William Drayton: The Only Way to Fix the Deficit: Multiply Jobs is a great example of unconscious status-seeking righteousness – well-meaning ineptitude and irrelevance, trapped in the old paradigm of debt-money, growth, and social conditioning. This kind of thinking is exemplary of people who are focused on the superficial “economic crisis,” not going deeper to see that we have a political (and even a social) crisis with, of course, an economic manifestation. This represents the success of the pseudo-science of “economics,” originally created with the intention to get most people to believe that objective “natural” forces are running their lives, not other people, classes, and institutions (Thurmond Arnold, 1937). Good problem-solvers always begin with as much accurate information about the overall problem as possible. It’s incompetent – or unconscious self-deception – to assume human nature isn’t the core and essence of the problem, and Bill Drayton isn’t necessarily incompetent…

“By providing the funding and the policy framework to many concerned and dedicated people working within the non-profit sector, the ruling class is able to co-opt leadership from grassroots communities, … and is able to make the funding, accounting, and evaluation components of the work so time consuming and onerous that social justice work is virtually impossible under these conditions” (Paul Kivel, You Call this Democracy, Who Benefits, Who Pays and Who Really Decides, 2004, p. 122 )

Phi Beta Iota: In Advanced Information Operations (IO) terms, we cannot fix the military until we fix government, we cannot fix government until we fix Wall Street and Main Street, we cannot fix the economy until we fix the society, and all of that requires a firm focus on human nature and the relations among humans. We live is a “whole system” and are mis-managing it by being ignorant and delusional about root causes and actual relationships. Until we get the truth on the table, we cannot deal with it. Good news: all it takes is ONE node able to blend intelligence & integrity, that “spike” will proliferate. The bottom line is that DEMAND creates jobs, and EDUCATION creates the demand for the RIGHT jobs. Taking one example, the US Army, it could apply Advanced Information Operations to create a 180 degree maturation of the mind-set of its personnel, and use that to “eat the old” and create the new. The US Army is going to suffer a nose dive in financial resources (as will the other services); the US Army is the ONLY service that must might be capable of “beating the dive” by re-inventing itself from inside out–starting with Advanced IO being about minds, not technology. Similarly, a single multinational could “get a grip” and re-invent itself overnight–the example will proliferate.

Last week, two tightly connected, but separately reported, headline stories broke. Wednesday the Bowles-Simpson commission issued its report with proposals for shrinking the federal deficit, which include cutting federal spending and certain tax rates while raising payroll taxes. Friday morning, as the commissioners were voting on the report, the dismal November jobs report came out. It revealed unemployment is not falling, but sustained and rising from 9.6 to 9.8 percent — the longest streak above 9% unemployment on record. The Commissioners gave it 11 out of their 18 votes, three votes shy of the mark that would have gotten Congress to take it up.

Job creation got an honorable mention but no real priority or substantive policy focus in the deficit commission’s recommendations. The new unemployment numbers illustrate why this was a mistake, both politically and fiscally. It’s true that we can’t tolerate high deficits much longer. But neither can we tolerate sustained 10% unemployment and risk long-term, self-reinforcing, structural decline of our labor force and economy. It’s time to tackle both issues — the massive federal deficit, and massive unemployment — together.

One central and oddly repressed fact in our discourse on controlling the deficit, is that the two goals are not mutually exclusive; they’re deeply interdependent. Mounting a massive jobs stimulus effort won’t increase the deficit — on the contrary, we can’t close the deficit without one. During the Clinton administration we went from a $290 billion deficit in 1992 to a $239 billion surplus in 2000 while creating over 20 million private sector jobs. That’s no coincidence; job creation and deficit reduction are inextricably linked. Higher employment increases the tax base and business profits so revenues go up, while expenditures on unemployment and other government dependency costs go down. Debt service also shrinks as a result.

The cumulative budget effects are huge. The Congressional Budget Office for many years tracked the potential impact of job growth on projected deficits, though it has apparently ceased doing so. But in 1995 it projected that just a one percent increase in employment would cut the deficit by $415 billion over six years. In fact, that’s roughly what happened. Now, imagine the impact on today’s deficit (currently $1.29 trillion and rising fast) if we brought the unemployment rate down four percentage points to a pre-recession range of 5.5 – 6%.

That would argue that a massive jobs program, if it worked, would be worthwhile even if it cost hundreds of billions. But in fact, it need not cost anything. We can have a “free,” budget-neutral jobs stimulus if we shift the current tax burden. We don’t have to increase net taxes to close the deficit, or for that matter, decrease them to create jobs. We simply have to change the distribution of what is taxed. Right now, one of the chief things we tax to fund the federal budget is jobs.

Payroll taxation is currently vying with income tax as the top federal revenue raiser (this chart shows it accounted for 42% of federal revenue in 2009, while income tax accounted for 43%). It is the largest tax 80% of Americans pay, and the most regressive. It kills jobs by inflating hiring costs over 15% and effectively subsidizing non-labor production factors – energy, materials, land — by an equivalent amount. That’s a whopping, perverse 30+% price signal giving business an incentive to be materials/energy/land/technology intensive but to avoid using labor.

This is a colossal mistake and a deep-seated, long-standing, fundamental problem for the economy, artificially depressing employment for decades. As I argued in a previous post, unemployment is much, much higher than official rates suggest, because the official rates arbitrarily and progressively define millions of Americans out of the workforce to keep unemployment looking lower than it actually is. Chronically under- and unemployed women, people of color, seniors, youth, people with disabilities, legal immigrants and others are not counted as unemployed by the Bureau of Labor Statistics. BLS numbers indicate 15 million Americans are officially unemployed, but that’s a small fraction of the number of Americans who would be working given the opportunity, but aren’t. The country would have to create a total of 80 million full-time jobs to give everyone who would like to work that chance.

But this mistake is correctable with a strategy called payroll tax shifting. If we cut payroll taxes, and started taxing inefficient use of non-labor items by an equivalent amount (for example via a non-labor VAT tax, carbon pricing fees or energy inefficiency taxes and/or any combination of many such available alternatives that could raise the revenue that we now get from taxing payrolls), we would reverse the distortion in labor costs, disincentivize wasteful consumption of things, reincentivize hiring of people, and create tens of millions of jobs.

The Bowles-Simpson deficit report and the debate that will follow in its wake represent an important moment for coming to grips with our deep economic problems and considering this kind of fundamental tax reform. Indeed the report proposed fundamental reforms, slashing income and corporate tax rates along with spending. But it chose not only to keep payroll taxes, but actually to increase them through raising eligibility ceilings. That would only make our jobs dilemma worse, which ultimately will worsen the deficit.

One of the report’s bright spots was a new recommendation that Congress consider a proposal from the previous Domenici-Rivlin deficit task force report, “Restoring America’s Future,” for a one-year payroll tax holiday to stimulate job growth. That’s another indicator of growing support for the idea of cutting payroll taxes to generate jobs, but it’s a short-term, token gesture compared to the fundamental game-changer we need. A one-year uptick in the perennial business cycle won’t fix our problems; we need structural reform.

As Alton E. Drew recently wrote in a blog about the Bowles-Simpson proposals’ effect on African American unemployment:
“While the co-chairs’ draft speaks to increasing some taxes and cutting unnecessary entitlement programs, it barely speaks if at all to the apparent structural unemployment gripping the nation.”

As the Domenici-Rivlin report itself states:

“Some politicians and economists present a false choice: reduce unemployment or stabilize the debt. Restoring America’s Future, however, requires that we do both — and begin now.”

If we’re serious about stabilizing our debt, speaking to the structural unemployment gripping the nation and improving long-term growth, we’ll use this important political juncture to spotlight payroll tax shifting as a thoroughgoing solution to our fundamental problems. The politics of fundamental reform are always difficult, but the politics of half-measures will prove impossible.
_______
William Drayton is board chair of Get America Working!, a nonpartisan, fuller employment policy citizen group that framed the payroll tax shifting proposal. Named by US News & World Reportas one of America’s 25 Best Leaders in 2005, he pioneered the concept of and coined the phrase “social entrepreneurship.” Drayton is a MacArthur Fellow and the founder and current CEO Ashoka: Innovators for the Public, a citizen movement dedicated to finding and fostering social entrepreneurs worldwide. A former management consultant at McKinsey and Company and faculty member at both Stanford and Harvard, during the Carter administration he served as Assistant Administrator of the Environmental Protection Agency (1977-1981) where he launched emissions trading among other reforms.

These ideas sound nice, but so is icing covering feces. Until we address the US financial crime tri-fecta (mortgage clearingho­use fraud, Wall Street derivative­s fraud STILL going strong, and the HUGE Federal Reserve fraud just now being recognized­, none of this matters a hill of beans.

The deficit commission is itself a fraud, and anyone doing the math can quickly see that it cuts only those things that harm the 90% and avoids any damage to those things that matter to the 10%.All individual income taxes should be eliminated­. The Automated Payments/T­ransaction (ATP) Tax should be substitute­d. That is not rocket science, all it takes is a Congress with integrity or a President with integrity. Either one will do, we have neither.

My personal view is that any time spent on single issues is time wasted. There is nothing wrong with this country that cannot be fixed by restoring the integrity of our electoral system and putting the common sense of We the People back in charge.

Well, John, here’s the result of a couple of hours worth of things tumbling more or less together on and off the web, spurred by your message on top of a quick note I had written to myself about creating jobs. It’s interesting how spontaneous synergies and convergences can show up when one is paying attention, and give us a worm-trail of iridescent insight. Of course, it helps if one is not wedded to the illusory myths of America and its core self-deceptions. As it is, I am not divorced, merely separated (to flail that metaphor).

And yes, I have found Bill Drayton’s article provocative, and even worthy in its narrow, right-now paradigm, in which it is a good idea (even excellent), but fails to address the causes of the predicament it addresses (and thereby treats its aspects as problems). It’s potential is to become a symptomatic band-aid, and to do good, but small good – small good that will ultimately exacerbate the predicament.

If we want to Get America Working, we must ask “Why?” – and not from the perspective of what will the simple fact of having jobs accomplish, but from the perspective of what shall be the purpose of the work that comprises those jobs. The one will maintain us in our false-god economic framework and lump us in our same old sophistries, the other will engage the hearts and minds of America. Push, rather than pull. Expand, rather than clump.

I trust that this somewhat pointillistic assembly, so serendipitously aggregated on a winter morning racked by my seasonal flu, will clarify that dichotomy as it expands into realms not yet embraced. And it’s not linear and its not reasonable, for it steps us out of our conditioning – a necessary precondition for successfully dealing with predicaments.

Create jobs?

Solely as an end in themselves? And what would those jobs do? And, most important, why?
Creating jobs for the sake of creating jobs (to provide incomes for workers so they can pay taxes, chip away at an impossible debt/deficit, be consumers, for politicians to look good politically, so “the economy” can grow, and…?) is an empty goal, and exactly backwards from what can work in the long term in the real world. First find some grand enterprise (or a series of smaller ones) that the entire polity can enroll in, then jobs will spontaneously generate in the society (not in the “economy”) as an integral part of accomplishing that enterprise’s (and society’s) mission. The mission of our society is not a healthy economy; the purpose of a healthy economy to support that mission, whatever that is (and it does appear that in the official propaganda, there is great effort made to avoid explicitly naming it)..

Growth for the sake of growth is the ideology of a cancer cell.

Edward Abbey

Then, for example, the tax rates can be rebalanced to support mission-directed jobs. Otherwise we are trapped in market values, endlessly looping in a money conversation with little or no human-values dimension, acting as though money was wealth and happiness and fulfillment. Too many otherwise astute people have spent too many decades in a social conversation monopolized by the pseudo-science of economics with its market-values monomania: the conversation has become sterile and destructive.

Values, vision, mission, means (perhaps you recall the early steps on the Model for Community Change)… “Jobs” is part of means, and only has life when the others are driving it. Any ambition to “create jobs” without generating motivation at the front end will fail. The broader the ambition, the wider the enrollment, the deeper the values engaged, the more jobs will happen. That broadness is in proportion to the appeal and breadth of the benefit from accomplishing the mission – that front-end motivation.

Obviously benefit for only the Oligarchs will ring hollow, and increasingly so as more and more people become politically activated and astute, no longer accepting the brainwashing when the benefit is concentrated for the very few, and no longer consenting to the Oligarch-chosen, self-serving means.

Anyway, politicians cannot “create” jobs (other than in government, and the Second Law of Thermodynamics scotches that – where will the money come from?) Since government can only give to some what they have taken from others, non-productive government-created jobs cause a death spiral as they suck the many dry for the support of a few. Eventually the marginal utility of that extraction goes negative as the many’s position is weakened and productive private-sector jobs are driven offshore (not that they are not already going there, pursuing corporate profit to the detriment of the people using the marketplace – the citizens, and only as a distant second, consumers). I like to believe that in some dimension citizens have a larger purpose in life than being consumers, but where is that to be found in our everyday social conversation?

What is the greatest portion of the population that can live off the rest? It would depend on the concentration gradient (and the extremes that inevitably occur), and we all know that Nature abhors a gradient.

The dis-embedding of market values and their supplanting of human values (as obsession with exchange value drives out consideration of use value) renders the polity sterile with no shared enterprise and mission. Money is unsustainable as an end in itself, and even money (especially debt-money) as a means to advance power runs into complexity and Second-Law effects, and stalls into negative marginal returns. The simple truth has been forgotten, that money is not value, but only a symbol for value.

The Oil Drum: Campfire | Can we solve two problems at once – unemployment and preparing for power down? (with particular attention to the comments)

The next (it should be the first) stage in this conversation is to ask, “What is the mission of our civilization, and of our country?” (for which we use those jobs to accomplish). What would be the purpose of those jobs (in non-market terms)? Is it even possible in this country, after decades of brainwashing by “economics,” for us to think (and converse) in non-market terms?

Divide-and-conquer distortions and distractions have expelled explicit statement of that mission and its goals, and the vagueness of the implicit sharing we do align around these days invites projection (so everyone can exist in his unchallenged solipsistic universe and be unaware of what others find important, thereby atomizing the polity).

A grand-plan purpose for the country would be nice, but even smaller goals would be better than more self-reflexive market-values inbreeding.

Beyond its inherent merit and explicit substance,William Drayton: The Only Way to Fix the Deficit: Multiply Jobs is a great example of unconscious status-seeking righteousness – well-meaning ineptitude and irrelevance, trapped in the old paradigm of debt-money, growth, and social conditioning. This kind of thinking is exemplary of people who are focused on the superficial “economic crisis,” not going deeper to see that we have a political (and even a social) crisis with, of course, an economic manifestation. This represents the success of the pseudo-science of “economics,” originally created with the intention to get most people to believe that objective “natural” forces are running their lives, not other people, classes, and institutions (Thurmond Arnold, 1937). Good problem-solvers always begin with as much accurate information about the overall problem as possible. It’s incompetent – or unconscious self-deception – to assume human nature isn’t the core and essence of the problem, and Bill Drayton isn’t necessarily incompetent…

Problem-solvers like Drayton aren’t looking at human nature because they know (if only subconsciously) they are seeking status by publishing this stuff. If they consciously knew what they were up to (and up against), then they would lose their effectiveness as preachers. It’s a great example of self-deception – bright systems-thinkers who refuse to look at their own deep motives. So far, it appears that only “events” (and consequent panic) will cause these people to look deeper.

This is why it’s impossible to avoid or even mitigate these crises, especially with an “economic” solution. Nothing can be done (except study and enroll the few who can learn within a different paradigm) until the people at the top enter end-game panic-mode and relinquish (as covertly as they took it) our political system. When times are good, those who have the ability to understand their motives and impacts will refuse to do it because it will adversely impact their drive for status: The Maximum Power Principle .

In the late 1950s, the social scientist Erving Goffman made a stir with a book that stressed how much time we all spend on stage, playing to one audience or another. Goffman marveled that sometimes a person is “sincerely convinced that the impression of reality which he stages is the real reality.”

What modern evolution theory brings to Goffman’s observation is an explanation of the practical function of self-deception: we deceive ourselves in order to deceive others better. In his foreword to Richard Dawkins’ The Selfish Gene, Robert Trivers noted Dawkins’ emphasis on the role of deception in animal life and added, in a much-cited passage, that if indeed “deceit is fundamental to animal communication, then there must be strong selection to spot deception and this ought, in turn, to select for a degree of self-deception, rendering some facts and motives unconscious so as not to betray – by the subtle signs of self-knowledge – the deception being practiced.” Thus, “the conventional view that natural selection favors nervous systems which produce ever more accurate images of the world must be a very naive view of mental evolution.”

In business, love, and politics, “sincerity” is everything. If you can fake that, you’ve got it made: “There are two other large realms in which the presentation of self, and the perception of others, has great Darwinian consequence: reciprocal altruism and social hierarchy. Here, as with sex, honesty can be a major blunder. In fact, reciprocal altruism and social hierarchy may together be responsible for most of the dishonesty in our species – which, in turn, accounts for a good part of the dishonesty in the animal kingdom. We are far from the only dishonest species, but we are probably the most dishonest, if only because we do the most talking.”

Based on the actualities of human nature as revealed, in large part, through evolutionary psychology, we may actually have a cultural crisis, and perhaps even a genetic one, with us all cruising together for a massive selection-event as the physical parameters (within and without) we have disregarded for so long catch up with us.

How can we transcend this predicament? Here’s a fun thought: one potential is through shared experience of it through mass computer- (and thus Internet-) based gaming, replacing the terminally abstracted and ideological “democratic process” with its total preemption by Oligarchs. It is only a matter of time until collective decisions are made through what will no longer be called “gaming” consoles. Then, it will even more be the propagandists determining outcomes through pre-supposing their advocacies – but as long as there is a critical mass of actual experience to be modeled and shared, reality can subjugate mythology, fantasy, and the “representation” lie. Our Lords and masters can’t buy everybody. Check this out… Jane McGonigal: Gaming can make a better world | Video on TED.com From yet another perspective, youth, properly guided by context-setting and tool-making, are key to the solution. In this thought experiment, the game-programmers express great power of presupposition, and are the critical focus for Oligarchic manipulation. However, there are latent cultural correctives that could kick in: FT.com / Technology – Anonymous cyberwarriors stun experts.

So to Get America Working in some real way, rather than with some ad hoc economic (i.e., political) agenda, the conversation and consequent engagement will require stepping out of the familiar (itself awkward) and out of our conditioning (excruciating!) into a different game entirely. Then the deficits will no longer be part of covert plutocratic debt-bondage scheme, but will become a footnote in the psychological history of America. I would venture that when this situation is understood by a critical mass of Americans (an imposing task), the subsequent withdrawal of consent will change history, if (and that’s a giant if) they are so shaken out of their stupor that they can see straight: “Manufacturing Dissent”: the Anti-globalization Movement is Funded by the Corporate Elite.”

It’s that slow, grinding event-driven panic attack that will shake us loose from a situation that the piecemeal activism of Get America Working will serve to perpetuate. What a depressing (and ultimately hopeful) turn it is that things must get worse to get better. At the present rate, with more-and-more debt the prescription for too much debt (even if the debt is socialized – deficits – while any gains are privatized) this system must become unstable and then anything goes (but that’s another riff)…